BII Express: Of Course Google Is Getting In Trouble With The Feds....

Google Is Getting In Trouble With The Feds Over Its “Social” Search

Google vs. All Other Online Advertising RevenueGoogle is huge in advertising, too (click to enlarge)

A privacy group has said it is considering filing a complaint with the FTC over Google’s new social search. Google recently rolled out a new search interface called “Search Plus Your World” which features “social” results from users’ network prominently. The problem? These “social” results are largely from Google’s own social network, Google+, and not from Facebook or Twitter. Google is increasingly using its dominance in search to promote its own services, whether they’re local reviews (displacing Yelp) or travel reviews and search (displacing lots of people). In those cases, Google could argue that it is doing what’s best for the user experience of its users, but in this case the self-promotion seems egregious given how much smaller Google+ is than Facebook and Twitter. It’s highly reminiscent of how Microsoft used its operating system dominance to promote its browser Internet Explorer, which is what got it in hot water with the DoJ.

This move was inevitable, in our view. Google has been in privacy advocates’ sights for years now, so of course they’re going to do something like this when Google does something like that. It’s also very hard to predict what will come out of it and what the government will do. It seems inevitable to us that at some point Google will get into serious trouble with the antitrust authorities. Will it be now over “Search Plus Your World”? Or will it be later over something else?

In any case, this is clearly a “tail risk” for Google: it’s unpredictable, and could end up paralyzing the company. 

In other news…

A key Apple supplier, M-Flex, pre-announced better-than-expected results for Q4, which will stoke excitement that Apple will have a blockbuster December quarter. M-Flex makes circuit boards used in smartphones and tablets and Apple is thought to account for 66% of its business. The company’s revenue will be $239 million, versus its $200-$230 million guidance.

Mac computer shipments in the U.S. were up by over 20% in the fourth quarter, while other big names like HP and Dell took hits, according to Gartner. Globally, total personal computer sales were down 1.4%.

Pandora recently announced at an investor conference that they are working on integrating with third party radio measurement companies such as Triton, Edison, and Arbitron, according to BoAML analyst Nat Schindler.  The move should allow them to better serve local advertisers, a market they really haven’t cracked yet.  See our explainer on Pandora’s business here>>>

Google is renewing its efforts to break into more of the Chinese tech market, according to statements by company officials. Despite disputes with the government two years ago, it’s clear Google realises that capturing part of the Chinese market is essential, and the company can’t afford to miss out when Apple and other tech companies are already making inroads in the country.

Amazon has agreed to use UltraViolet, the digital movie format pushed by Hollywood studios. UltraViolet lets customers buy a movie from participating retailers and stream it to different devices. With backing from a retail giant like Amazon, UltraViolet could really take off in popularity, and accelerate the trend toward buying digital copies of movies online. That would be welcome news to the movie industry, where DVD sales are collapsing.

Microsoft’s share of the search market in the U.S. is finally bigger than Yahoo’s. Both together, though, still have only ~30% of the market, and Microsoft is still burning $2+ billion a year in losses. Microsoft’s obsession with this business is a fool’s errand.

Facebook will hit 1 billion users by August, according to estimates from iCrossing. It’s a mind-boggling number, but there’s still a lot of room for growth outside of countries where the site is already popular. In the U.S., for example, 49% of Americans have registered for Facebook, but only 3% of India’s population has.

Mobile commerce will earn $26 billion in revenue in 2012, up 71%, according to estimates in a research note from BofA. The vast majority of that revenue will come from purchases via smartphones, but tablet m-commerce revenue is expected to jump a whopping 196%. Both mobile and tablet m-commerce are still a fraction of the overall e-commerce market.

Samsung is considering teaming up with at least parts of Olympus’ business, according to a Reuters report. Samsung is already a leader is consumer electronics, but may be looking at expanding its reach into healthcare and other markets.

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